According to Rational Expectations Theory,if the Last Three Years of Inflation

question 114

Multiple Choice

According to rational expectations theory,if the last three years of inflation were 0%,2%,and 4%,respectively,one would expect inflation the following year to be:

• A) 4%.
• B) 6%.
• C) 2%.
• D) 0%.
• E) 3%.

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